How Your Employees Really Feel About Your Merger or Acquisition

March 4, 2019

Mergers and acquisitions (M&A) can be an exciting time for growing organizations—but they’re not always an exciting time for employees. With more and more companies merging and being acquired all the time, business leaders need to be cognizant of the impact these changes have on employees.

In this article, we’ll share a little bit about the rise in M&A activity, how your employees really feel about your merger or acquisition, and how you can ease employee anxiety during the transition.

The Rise of M&A Activity

We’re always hearing about company mergers and acquisitions taking place in the market. In fact, the last several years have shown record-breaking M&A activity across the board. According to Mergermarket, there was a total of $3.5 trillion of global M&A activity in 2018 alone—and it isn’t expected to slow down anytime soon.

In Deloitte’s M&A trends 2019 report, 79 percent of M&A executives expect the number of deals their organizations close over the next year to increase. Survey respondents also expect industry and sector convergence to be a major theme in 2019 as an increasing number of companies look to expand their markets and diversify their products and services.

M&A activity may very well be on the rise, but that doesn’t mean that most deals go off without a hitch. In fact, according to an article by the Harvard Business Review, 70-90 percent of M&A deals are “abysmal failures.” Why such high failure rates? It all comes back to the heart of every business: the employees.

A Culture of Uncertainty

It goes without saying that during a merger or acquisition, business leaders have their hands full. That’s why they often don’t focus enough on the company’s existing employees and how they might feel during a time of significant change.

Mergers and acquisitions often create a lot of uncertainty among employees; they typically involve a set of complex changes that likely have a direct impact on the company’s employees. This type of changing environment is one of anxiety, confusion, and ambiguity—all of which can undoubtedly damage your company’s productivity and employee engagement.

However, if your company is merging, acquiring, or being acquired, don’t worry—with the right strategy in place, you can get it right and turn anxiety into something positive. By focusing on a few key areas and going in with a plan, your organization can make it through the transition and come out on the other side not only unscathed but also more successful because of it.

Be Transparent About What’s Changing

One of the biggest employee pain points during a merger or acquisition is a lack of transparency. Employees understand that company leaders aren’t going to share every single business detail—but they also expect (and deserve) transparency when it comes to how the merger or acquisition will impact them and their work.

What can you do to be more transparent with your team? First, consider what’s changing and how it will impact your employees and the work they do on a daily basis. Will there be layoffs? Will several teams be restructured? Will the company rebrand?

Chances are that you won’t know all the answers to these questions right away, and that’s fine; however, you should make it a point to share information with employees as it becomes available. One of the biggest mistakes that company leaders make during an M&A transition is going completely silent. Instead of stonewalling employees and leaving them to make their own anxiety-induced assumptions, you should keep them up to date, acknowledge the difficult transition taking place, and express how it will drive positive change for the organization.

Encourage Open Communication

During a merger or acquisition, communication is key. Some people might roll their eyes at this point, but it truly could not be more important during times of significant cultural change at an organization. Employees are going to talk during a merger or acquisition—that’s just a reality. You can be part of that conversation if you open the lines of communication.

How can you encourage open communication during a merger or acquisition? Of course, you want to enhance internal communication during this time; however, you should also take it a step further than that. Encourage employees to come to company leaders and managers with questions. Give them a forum to share their thoughts and concerns.

Some companies do this in a town hall-style meeting, which allows employees to ask leadership open and honest questions. With that said, employees often don’t feel comfortable opening up in a more formal, tense environment. Consider investing in technology, such as live org chart software and collaboration tools, to improve internal communication and ensure your employees always feel heard.

Set and Define New Business Goals

Another way to effectively manage change during a company merger or acquisition is to set and define new business goals. What will the new, integrated organization look like? How will the transition impact the company’s future growth and bottom line?

Employees are on the same team as you—they want to know what they’re working toward and why. To help ease uncertainty during a merger or acquisition, you should take the time to share the new company vision and a road map for success to show employees how they can help bring that vision to life.

Define New Roles and Responsibilities

Of course, during a merger or acquisition, employees are worried about the next phase for the integrated organization and where they fit in. One of the best ways you can manage this change is by clearly defining new roles and responsibilities—not to mention how those roles and responsibilities will ultimately help the new version of the company meet its unique business goals.

That said, figuring out how roles and responsibilities fit within the new organization is certainly challenging. You can make the process both easier and more efficient with the help of workforce planning tools. This technology provides a highly visual platform to help inform M&A decisions related to staffing.

With interactive, easy-to-use planning software, you can create live org charts and share them to collaborate on what company roles and responsibilities will look like in a post-M&A world. These solutions allow employers to work on several org charts at the same time, share working drafts with company leaders, and offer employees a company org chart that’s always up to date.

Showcase New Growth Opportunities

Instead of focusing only on the negatives and what will change during a merger or acquisition, you should make it a point to showcase new growth opportunities for employees. By emphasizing how the changes will be positive for the organization—and how they can, in turn, be positive for employees—you can shift the perspective and reassure your team in a changing environment.

For example, a corporate merger or acquisition might offer employees more funding and resources or create talent gaps that lead to internal promotions, a round of hiring, or both. In other words, you should identify the M&A pros and share them with your team in a way that excites and motivates them to remain engaged despite the changes happening around them.

Invest in Technology to Ease the Process

By investing in the right technology, you can ease the M&A process for both yourself and your employees. Live org chart technology (like Pingboard) is extremely useful during a merger or acquisition in a whole host of ways. It helps not only with workforce planning but also with internal communication and team building.

How? With interactive, personalized employee profiles, team members can easily access contact information, identify who’s who in the organization, and put faces to names. They can also view a live version of the company org chart and follow the progress as the company structure evolves.

Transform Your Business with a Live Org Chart

By being transparent, keeping the lines of communication open, sharing new growth opportunities, defining new roles and responsibilities, and clearly defining business goals, you can make the M&A process a much smoother transition for your employees.

Additionally, with the help of live org chart software, you can encourage relationship building during the integration, share the new company structure with employees, and effectively manage change to maintain engagement and productivity during a merger or acquisition.

by Cameron NouriI am the Director of Growth at Pingboard. I consider myself an entrepreneur at heart. I love trying new things and taking educated risks on new ventures, both professionally and in my personal life. I bring that passion to work everyday where I enjoy helping others discover the power that Pingboard can unlock.